Government launches program to encourage shale gas exploration

President Jair Bolsonaro approved this Thursday (30) the launch of a program to encourage the exploration and production of oil in unconventional deposits, such as shale gas, which changed the energy scenario in the United States.

The program aims to try to unlock the environmental licensing for the activity, which is accused of causing damage to nearby communities in some American regions and was banned by several Brazilian cities from the mid-2010s.

Unconventional reserves are those found in rocks with low permeability, unlike pre-salt rocks, for example, whose pores ensure the displacement of oil and gas to the pipelines that will take them to the platforms.

In non-conventional ones, it is necessary to make fissures in the rock for the reserves to move, in a process known as hydraulic fracturing, which injects large amounts of water underground at high pressures.

In an order published on Thursday (30), Bolsonaro approves a resolution by the CNPE that proposes the reduction of the royalty rate charged on these deposits to 5% of the production value, against the 10% generally charged in other oil fields in the country.

The text also authorizes the allocation to the segment of mandatory investments in research provided for in the country’s oil concession contracts, which are equivalent to 1% of the revenue of each project, and determines the opening of a notice for qualification to a program called Poço Transparente .

Launched in 2020, the program foresees “to increase knowledge about unconventional oil and natural gas reservoirs and the hydraulic fracturing technique” so that the government “can adopt the best strategies for the exploration and production of these resources in the medium and long term” .

“Unconventional oil and natural gas reservoirs have leveraged the participation of countries like the United States of America and Argentina in the world production of hydrocarbons, generating wealth and development”, says the text of the program.

The government argues that the possibility of producing natural gas in unconventional reservoirs can significantly expand the supply of fuel to the Brazilian market, especially in sedimentary basins in the interior of the country, which are far from the gas pipeline network.

And he cites studies that point to possibilities of reserves in states that currently do not produce oil and gas, such as Mato Grosso, Mato Grosso do Sul and Minas Gerais, for example. Paraná, which produces fuels from oil shale, is another promising state.

Hydraulic fracturing, however, faces strong resistance not only from environmentalists, but also from agribusiness, which fears the effects of the intensive use of water by the activity or even the contamination of groundwater with chemical products injected into the subsoil.

The government came to bid on areas with potential for non-conventional in 2013, but the process was surrounded by criticism. A month before the auction, the SBPC (Brazilian Society for the Progress of Science) issued a statement recommending the suspension of the offer.

After the auction, a series of injunctions contested its results and cities in several states, mainly Paraná, began to prohibit this type of exploration. The auction awarded 72 blocks with unconventional potential, 16 of them in northwestern Paraná.

This type of exploration began to gain strength in the United States at the turn of the 2010s and led the country to reduce its external dependence on oil to the point of starting to export the commodity. More expensive, however, the technology suffered more with the fall of international prices in the pandemic.

In second place in the ranking of the largest unconventional reserves estimated by the International Energy Agency, just behind China, Argentina has also recently started to produce, in an area known as Vaca Muerta.